To finance the full value of the asset, a finance lease comes as tax effective. It is a legal contract between the lessor and lessee.
When it comes to financing the valuable assets, leases are used to finance them. For example, the software, office equipment, trucks or farm machinery etc. are the assets owned by the financier. While using such assets having the possession, the customer will keep paying the rental payments. Soon after spending the final amount that includes residual/balloon payment, the customer will get the ownership of the asset.
So, do you think the finance lease is the right choice for you? There are various parameters to decide this. However, the GST is payable for both residual and the monthly lease payment. If input tax credits are registered for GST, it may be available under certain circumstances. If the financed amount is under the depreciation limit set by ATO, you can claim full rental amount as a tax deduction. And for financing above the depreciation limit, you can claim the interest charges on the lease as well as depreciation.
To determine the best options, get financial advice from your accountant or financial advisor.
Maximum loan term is for 7 years.
Up to 100% of the asset value can be financed